How trade deals hurt the climate

Ben Lilliston argues for international trade rules that address the climate crisis rather than reinforcing the high GHG-emitting industrial model of agriculture.

Photo: IATP

As the United Nations Paris Climate Agreement comes into force, national governments are discovering that policies to reduce greenhouse gas emissions (GHGs) are conflicting with trade agreements. The success or failure of the Paris agreement will largely depend on which international commitments will take precedent: trade or climate?

Nearly 80% of countries’ plans to reduce GHGs under the Paris agreement include actions on agriculture. Most agricultural emissions are associated with an industrial model of agriculture designed to compete in global markets. Trade rules reinforce high GHG-emitting industrial production in many ways:

They place restrictions on how governments can support farmers as part of strengthening national and local food systems that are more climate resilient and less energy intensive;

They place restrictions on countries’ tariffs to protect their own farmers from cheap imports;

Trade and investment rules are increasingly linked to ‘land grabs’ of agricultural or forest land for large scale industrial farming.

Regional free trade agreements often include provisions that allow foreign corporations to sue governments if the companies feel new regulations led to unfair treatment and undercut profits. Using such powerful provisions, corporations have challenged government policies that restrict oil pipelines, offshore drilling, and fracking.

Trade rules also limit governments’ ability to enact and expand energy policies that address climate change. Last year, the World Trade Organization ruled that India’s solar programme discriminated against foreign (in this case U.S.) solar panel producers. The WTO determined that India’s climate obligations did not protect it from trade rules.

As opposition to free trade agreements rises, a new approach is badly needed. This is particularly critical for agriculture, whih is especially vulnerable to climate change. Trade agreements should not be given legal priority over other global agreements. Our climate challenge demands trade rules that support international cooperation towards sustainability, starting with the urgent need to curb GHGs and support climate adaptation.

Ben Lilliston (BLilliston@iatp.org) is the director of corporate strategies and climate change at the Institute for Agriculture and Trade Policy.